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Also keep in mind the investment risk you take by not exercising. If the value of your company stock goes down in the future, the drop in value could easily overwhelm any tax savings you might see. Then again, exercising now might cut you off from any future appreciation in the stock (if you immediately sell the stock, that is).

If he's worried about investment risk, he could buy puts on the company, and/or sell calls if he's quite certain it won't go up.
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